FEDERAL COURT OF AUSTRALIA

Jessop v Westpac Banking Corp [1999] FCA 1646

PRACTICE AND PROCEDURE – refusal by judge to accept an application for filing – whether cause for action – whether interlocutory decision

MICHAEL JESSOP v WESTPAC BANKING CORPORATION

Q 222 of 1999

SPENDER, EMMETT & DOWSETT JJ

17 NOVEMBER 1999

BRISBANE

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appeal be dismissed with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

DOWSETT J: 

1                     On or about 12 July this year, the appellant sought to lodge an application and supporting affidavit in the registry.  The Registrar referred the matter to a Judge of the Court pursuant to Order 46 Rule 7A, which provides:

If a document presented to a registry in any proceeding, including any document which is, or will, if issued, become an originating document, appears to a Registrar on its face to be an abuse of the process of the Court, or to be frivolous or vexatious, the Registrar may refuse to accept or issue it, or may seek the direction of a Judge who may direct him –

(a)       to accept or issue it; or

(b)       to refuse to accept or issue it; or

(c)       to refuse to accept or issue it without the leave of a Judge first had and obtained.

2                     Drummond J directed the Registrar not to accept the application.  Presumably, the affidavit was also rejected.  From this decision, the appellant has purported to appeal as of right.  Assuming that the exercise of power by Drummond J was capable of being the subject of appeal, it seems probable that the decision was interlocutory and that leave would therefore be necessary.  Whether this is so or not, I am of the view that his Honour's decision was correct.

3                     The application purported to be pursuant to the Bankruptcy Act 1966 (Cth), with specific reference to par 40(1)(g).  It is quite clear that the matter has no relationship whatsoever to any possible proceedings in bankruptcy.

4                     Paragraph 1 of the application recites:

The action currently being taken by the respondents against the applicant lacks any proper foundation in law since the requirements of the provision cited have not been met.

5                     The reference to “the provision cited” is apparently to the Bankruptcy Act.  The argument appears to be, as the appellant revealed in argument, that he is being treated like a bankrupt, although he is not one.  That, of course, is a matter of personal opinion rather than legal conclusion.

6                     The application claims the following interlocutory relief:

(1)       An order staying action presently in train against the applicant generally, but the auction of his property presently scheduled for 14 July 1999.

(2)       A judicial review for legality of all action that has to been taken against the applicant since 12 January 1999 pursuant to the financial arrangements which the applicant entered into with the first respondent on 30 June 1995 to properly determine what the rights of the parties to the action are.

7                     Clearly enough, the application does not, itself, demonstrate any cause of action, let alone any factual basis for the interlocutory relief sought.  The appellant’s affidavit, however, clarifies the matter a little.  Initially, the appellant appears to speak of a loan transaction between him and the respondent.  However, it eventually becomes clear that he is concerned about a guarantee of a company debt which he has given.  His brother is a co‑guarantor.  He alleges that his brother has misappropriated company funds and that the respondent is, in some way, liable for at least part of the misappropriation, although there is no apparent basis for such an assertion.  It is then asserted that the respondent has appointed receivers and managers and that the result of this has been to freeze the appellant's assets.  I should say that it is now common ground that there has not yet been any attempt to enforce the guarantee against the appellant’s assets.  It is then alleged that the receivers and managers have misconducted themselves in such a way as to cause loss in the realisation of the company’s assets.  It is alleged that:

The ‘receivers and managers’ were aware of the value of the company’s machinery, but failed to realise this value by foreclosing on the machinery.

8                     It is not clear whether this means that they failed to realise the value because they foreclosed on the machinery, or that they failed to realise the value by failing to foreclose on the machinery.  In any event, no detail is given of the way in which this may have caused loss to any party and, in any event, it seems to be opinion evidence, not justified by any evidence as to specialist qualifications.  It is also alleged that the receivers and managers failed to follow advice given to them by the appellant.  Again, this does not seem, in itself, to be sufficient to raise a cause of action.  At this point in the affidavit, the appellant diverges into what has become known as the “currency point”, which concerns the validity of banknotes and coins issued in this country.  It is a question which has been considered on a number of occasions in a number of cases and I need not, I think, pause to discuss them, save to say that the High Court has made it quite clear that it considers the point to have no substance.  See, for example, Re Skyring (1994) 68 ALJR 618.

9                     My grounds for concluding that Drummond J was correct fall into two categories which can be compendiously described as “points relating to jurisdiction”, and “points relating to subject matter”.

10                  This Court has only the jurisdiction conferred upon it by statute.  As far as I can see, there is nothing in the application or the supporting affidavit which could be said to invoke the Court’s jurisdiction.  As I have said, there is reference to bankruptcy, but the matter does not involve the Bankruptcy Act.  It is conceded that no bankruptcy notice or other proceeding has been served upon the appellant.  Although some of the facts alleged might suggest a possible claim under the Trade Practices Act 1974 (Cth), they do not raise such a cause of action.  As to the coinage point, it has no prospects of success.  In the course of his argument, the appellant sought to get around this difficulty with the coinage point by referring to cases concerning issue estoppel, pointing out that he was not himself a party to any case in which the coinage point had been resolved by the High Court.  Although this may be correct, it is not an answer to the problem which he faces.  The point is simply not arguable in law, much as it would be unarguable to assert that consideration is not a necessary element of a contract.  If a point is clearly unarguable, proceedings based upon it are destined to fail, and are therefore frivolous or vexatious.

11                  As to subject matter, there is an allegation of misconduct against the respondent, but it is completely unparticularised.  There is a claim of misconduct against the receivers and managers, but they are not parties and again, it is unparticularised.  There is the currency point.  I have disposed of this.  Further, if any of these claims had prospects of success, the company would be the proper appellant.  It is true that as a guarantor, were the appellant to meet the debt or be sued on his guarantee, he might have access to such defences as the company itself has, but those conditions precedent have not occurred.

12                  Thus there is no cause of action of any kind demonstrated on the material and, more particularly, no cause of action within the jurisdiction of this Court.  It may be that his Honour incorrectly assumed that the auction which was contemplated was of the appellant's assets.  It seems quite clear now that this was not the case.  That is of no relevance for present purposes.  His Honour was correct in directing that the relevant documents not be received.  The appeal should be dismissed.

SPENDER J: 

13                  I would ask Emmett J to give his judgment.

EMMETT J:

14                  I agree.  As my brother Dowsett has said, this is an appeal from a direction given by a Judge of the Court under Order 46 Rule 7A.  Assuming that such a direction is a “judgment” from which a right of appeal arises, it could only be an interlocutory judgment.  Accordingly, leave would be required.  There has been no application for leave, and the appeal therefore is incompetent.  However, it is desirable to indicate the view which I have formed on the assumption that there was an application for leave and that leave were granted.

15                  I agree with my brother Dowsett that nothing in the affidavit sought to be relied on in support of the proposed application discloses a cause of action in respect of which this Court would have jurisdiction.  It may or may not be the case that the appellant, as a guarantor of the obligations of the company to the respondent, could have some cause of action.  However, no basis has been established for indicating that that is a cause of action within the jurisdiction of this Court, generally for the reasons given by my brother Dowsett.

16                  The rule of law depends on the certain performance by a court or tribunal of its duty to exercise its jurisdiction.  To admit a power in a court or tribunal to decline to exercise its jurisdiction in a case instituted on reasonable grounds for a proper purpose is to assert a power to elevate  abstract notions of unfairness or want of justification above the law itself - see Brennan J in Walton v Gardiner (1992-1993) 177 CLR 378 at 415.

17                  Similarly, litigants should not, under the cover of the inherent jurisdiction to stop abuse of process, be deprived of the right to submit real and genuine controversies to the determination of the Courts by the due procedure appropriate for the purpose - see Dixon J in Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 at 92.  However, if a Court is of opinion that a plaintiff cannot succeed, there is every reason for protecting a defendant from vexation by the continuance of proceedings which must be useless and futile – see Latham CJ in Dey v Victorian Railways at 84. 

18                  It has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be fore-doomed to fail – see Mason CJ, Deane and Dawson JJ in Walton v Gardiner at 393.

19                  For the reasons indicated by my brother Dowsett, it is quite clear that the proceedings which the appellant sought to institute in this Court were doomed to fail.  In my view, the appeal would be dismissed.

SPENDER J: 

20                  I agree with the reasons of Justice Dowsett and Justice Emmett, and, in fact, I think the central finding for my conclusion which I share with Justice Dowsett and Justice Emmett that the appeal must fail, is in the finding by Drummond J, where he said:

I can see no factual foundation at all which might possibly justify the grant of any of the relief claimed including an order stopping the auction.

21                  If that conclusion is correct, as I think it is, then justice demands that the direction which his Honour gave be given.  The order of the Court is that the appeal is dismissed.

SPENDER J: 

22                  The order of the Court is that the appeal is dismissed with costs.

Associate:        

Dated:              9 December 1999